June 20, 2021 | Christianah
A “Status certificate” is a common term Buyers often come across when purchasing a condominium unit. This document is very important and a failure to review it before finalizing a purchase can bring about undesirable consequences. In our blog post today, we will discuss the components of a Status certificate and why it is essential for Buyers to be aware of its implications.
What is a Status certificate?
A Status certificate is a document that provides necessary information about the financial status and current state of a condominium unit and the condominium corporation. By virtue of Section 76 of Ontario’s Condominium Act, this document is to be provided by a condominium corporation when requested, with respect to a unit in the corporation.
What does it contain?
Pursuant to Section 76 of the Condominium Act, a Status certificate must contain the following :
- Common expenses: The common expenses for the unit would be listed, this may include utilities like gas, hydro, water, maintenance, etc.
- Increase in common expenses, if any: Where there is an increase in common expenses for the current fiscal year, the Status certificate must state this and provide the reason for the increase.
- Assessments that have been passed to increase the reserve fund and the reason for the assessments: Reserve funds are necessary for certain replacements and repairs by the condo corporation.
- The by-laws and rules of the condominium: This could include parking rules, pet policies, use of common elements, leasing rules, and general rules that guide the operation of the condo.
- Legal proceedings and claims: The Status certificate would give a statement of any pending lawsuits or judgments against the corporation. It also provides the minutes of the corporations’ general meetings.
- General information: The Status certificate would also contain general matters like the names and address for service of the directors and officers of the corporation, duties and rights, the current insurance status of the condominium, etc.
Why is it important to obtain a Status certificate?
It is important to obtain a Status certificate so one can be aware of the financial and legal state of a condominium building before purchasing a unit in it. It also helps Buyers to be informed of any current debts on the prospective unit, know the available reserve funds for maintenance or any other possible liability that may be incurred. In addition, the Status certificate helps to inform lenders of the condition of the condo, before financing a unit – this is an important requirement for any lender.
Who pays for the Status certificate?
This depends on the location of the condo unit. For example, in Ottawa, the Buyer pays for the Status certificate while in Toronto, it is usually paid by the Seller. The fee paid is $100 and can be done through a written request or online – depending on the specific condominium corporation.
How long does it take to get a status certificate?
Once a request is sent in, the status certificate must be given within 10 days. This can be made quicker for an additional fee.
Although there is no legal obligation to obtain a Status certificate, it is highly recommended for both Buyers and Lenders to get one and review adequately so as not to incur avoidable risks. It is also advisable to provide the status certificate to your real estate lawyer to adequately protect your interests in making a final decision.
At Northview Law, we would love to discuss any questions you have about purchasing a condo or any other real property. You can book a free consultation with Northview Law on this link, or contact us at 416-639-7639. We look forward to hearing from you soon.